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Significant effort still required to complete COREP and FINREP say many firms with XBRL reporting remaining a key challenge

MPI Europe, the specialist financial services consultancy, publishes today the results of our survey conducted into firm’s preparation for the Capital Requirements Directive (CRD IV) incorporating COREP and FINREP which will come into effect on 1 January 2014.

Our research highlighted a widely held concern about the level of effort still required to achieve compliance. Firms are feeling the pressure of the deadline which will radically increase the granularity and format of data that they need to source, analyse and report.

Key findings identified by our survey were:

  • Significant effort still required - Whilst firms reported that headway was being made in laying out processes and strategy, the majority of respondents indicated they still have a ‘large’ or ‘significant’ amount of work to do to achieve compliance.
  • XBRL reporting a key challenge - 75% of respondents had not tried to produce and validate test XBRL instance documents at the time of the survey. This was despite the importance of XBRL being identified as a ‘critical’ factor by firms in the choice of a reporting solution.

The analysis showed that some are discovering the availability of information and specialist knowledge internally a restriction. Given this is only one of many regulatory and compliance challenges they currently face, it would seem likely that they will need additional external resources and assistance to meet this European Union implementation of the Basel III capital requirements.

Adrian Maconick, Services Director at leading CRD IV reporting vendor Finsbury Solutions, comments: “The results of the survey are in line with what we are seeing in the market. COREP and FINREP are proving a major challenge for many firms. The increased granularity of reporting, and technical challenges of XBRL require a practical solution backed by expert advice that can be implemented within tight timescales. We are seeing an increasing trend of large scale or strategic data warehouse based projects that won’t meet the deadlines.”

MPI surveyed a range of financial sector firms to understand how prepared financial firms were for the key challenge of CRD IV. The survey was concluded in November 2013.